Calgary, Alberta / ACCESSWIRE / March 10, 2014 / Canoel International Energy Ltd. ("Canoel" or the "Company") (TSX VENTURE: CIL) is pleased to confirm that Canoel Italia Srl, its 100% owned Italian subsidiary, has received the final approval for the Environmental Impact Assessment report which had been prepared for the Torrente Vulgano gasfield. As disclosed previously by the Company, the Ministry of Economic Development had awarded this field to Canoel on the basis of the Company's technical presentation and program to resume production after a competition between several oil and gas companies. Approval of the Environmental Impact Assessment report will now allow Canoel to proceed with the final steps to commence production. Gas production is anticipated to start in the latter part of 2014 at a rate of 10,000 cubic meters/day (approximately 353 mcf/d or 59 boed). Reserves, as presented in the company's most recent NI 51-101 report for the year ended March 31, 2013, have been assessed at 852 million cubic feet of natural gas. Given the current operating parameters, Canoel projects that these assets will create revenue of approximately $1.49 million annually.
Also in Italy, Canoel has initiated the approval process for the installation a 1 MW cogeneration power facility at the Masseria Grottavecchia field which the Company operates with a 20% working interest. Cogeneration equipment, worth approximately $700,000, has already been acquired. The Company expects that sale of electricity to the state-owned electrical distribution company (ENEL) will commence by the first quarter of 2015. Conversion from gas to electricity is anticipated to maximize revenues from this field. Current gross reserves of the Masseria Grottavecchia field are estimated at 26 million cubic meters (918 million cubic feet). Initial gross production is expected at 21,000 cubic meters/day (approximately 740 mcf/d) or 4,200 cubic meters/day net (148 mcf/d net). Considering an average gross production of 7,000 cubic meters/day (247 mcf/d or 41 boed) over the next 10 years and that 1m3 is the equivalent of 3kwh, the field is anticipated to generate 78,000 MW of total electricity. The numbers and calculations presented here are internal estimates by Canoel and are expected to be validated in the forthcoming NI 51-101 report for the year ending March 31, 2014.
Canoel's CEO, Andrea Cattaneo, states: "It is exceptionally encouraging to see the progress on these two fields within our portfolio of operated Italian properties, especially considering that these properties will increase our Italian production by an additional 14,200 cubic meters/day (approximately 400 mcf/d or 67 boed). Our strategy of acquiring low cost fields where we can increase production levels and generate cash flow continues to advance the company's growth and allows management the time to source new acquisitions of larger scale."
Canoel is a TSX-V listed company trading under the symbol "CIL". The Company's focus is creating shareholder value through the acquisition and development of low-risk exploration and production opportunities which offer strong logistics and close proximity to refineries and pipelines. Canoel's Management and Directors have extensive international and governmental experience and possess the contacts and technical knowledge necessary to execute their strategy.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information in this press release is forward-looking within the meaning of applicable securities laws, and related to anticipated financial performance, events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and "expect" or similar words suggest future outcomes. By their nature, such statements are subject to significant risks, assumptions and uncertainties, which could cause the Company's actual results and experience to be materially different than the anticipated results or expectations expressed. Although Canoel believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Canoel can give no assurance that they will prove to be correct.
In particular, forward-looking information and statements include, but are not limited to: (i) the capital expenditures required in order to re-commence production on both the Torrente Vulgano and Grottavecchia Fields; (ii) the ability of the Company to re-commence production; (iii) the price of natural gas in Italy; (iv) the ability of the Company to comply with certain regulatory requirements; (v) anticipated capital expenditures required to re-commence production; (vi) the Company's low overhead costs; (vii) the Company's ability substantially increase its oil and gas production by the end of 2014; (viii) the Company's ability to produce gas for industrial and retail markets in Europe.
These statements are based on certain assumptions and analysis made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements include, but are not limited to: (i) assumptions related to international natural gas prices; (ii) ability to obtain regulatory approvals; (iii) costs of construction and development; (iv) availability and cost of labour and management resources; (v) performance of contractors and suppliers; (vi) availability and cost of financing; (vii) assumption the Company will continue to focus its activities through low-risk exploration and production opportunities offering logistical and proximate locations to refineries and pipelines and gas ducts; and (viii) the Company's business strategy and outlook.
Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from the Company's expectations. Such risks and uncertainties include, but are not limited to, risks and uncertainties relating to: (i) political and economic conditions in the countries in which the Company operates or may operate; (ii) fluctuations in foreign exchange rates and natural gas prices; (iii) the Company's ability to access external sources of debt and equity capital; (iv) failure to obtain any required regulatory approvals; (v) regulatory and governmental decisions including changes to environmental legislation; and (vi) availability and cost of labour, equipment and management of resources.
Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Canoel undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
For further information, please contact:
Jose Ramon Lopez Portillo Andrea Cattaneo
Chairman of the Board President & CEO
Email: [email protected]
Telephone: (403) 938-8154
Telefax: (403) 775-4474
This press release is not to be distributed to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities law.